The Total Money Makeover by Dave Ramsey – Baby Step Seven Building Wealth

Will You Try To Pay Off Your Housing Loan ASAP If You Have One? - 2nd revisit

The Total Money Makeover by Dave Ramsey – Baby Step Seven Building Wealth

by Hank on May 10, 2010

In a previous posts, we reviewed the first six steps of Dave Ramsey’s seven-step guide for reducing debt and building wealth in his book, “The Total Money Makeover”. As we will be covering each of these “baby steps,” as Ramsey calls them, in individual postings, let’s look at the final one.

All Debts Paid. When you complete the Total Money Makeover plan, you will have all of your debts paid off including your home. Without any payments for a car, a house, college, and other everyday expenses, you are free to invest and spend your money to live the life that you always wanted to have. With no payments to make on consumer loans, you can really attack your investing, buy real estate, invest in a small business, etc. The possiblities are endless when you have all of your obligations paid for.

Live Like No One Else. Dave Ramsey is famous for saying several catch phrases. One of his most popular is, “Live like no one else, so eventually you can live like no one else”. With a little bit of pain and discomfort early in life while you live on a strict budget, you can have the life that you always dreamed of later during your retirement years. It takes hard work to live a carefree life with no debts or money worries. It is not easy, and Dave Ramsey never pulls any punches with that respect. But, he does paint an awesome picture of the end result. It is a life of doing whatever you want….living like no one else. Normal life in America is living paycheck to paycheck, poor, no savings, and a mountain of debt. But, it does not have the be that way. If you follow the baby steps, incredible things are possible.

Give Like No One Else. One of the incredible benefits of being debt free and having no payments for loans is that you can give to all of the charities that you want to. You can give freely to your church without worrying about bouncing the check to the electric company. With no bills you can give freely of your time and energy to the causes that mean the most to you. The possiblities are endless, and the world is at your fingertips at the end of this journey.

A Review of the Basic Steps for Saving, Eliminating Debt, and Building Wealth

Ramsey’s program and book, “The Total Money Makeover”, include the following baby steps to financial freedom…

Step One: Save $1,000 for an emergency fund
Step Two: Use the debt snowball method to pay off your debt
Step Three: Complete the emergency fund
Step Four: Invest 15% for retirement
Step Five: Save for your children’s college
Step Six: Pay off your mortgage
Step Seven: Start building wealth